In response to BT queries, the Monetary Authority of Singapore (MAS) has recently announced that it won’t play a part in the repossession of a home if the mortgage is default.
As of today, mortgage arrears in the US and UK are incredibly high, putting millions of people into risks of being thrown out from their homes.
The now 60 percent government owned British lender Royal Bank of Scotland also announced that it will not intervene with the repossession of homes of mortgage customers whose arrears fall in the default of six months.
Other UK mortgage lenders have allotted three months before repossessing customers’ homes as a response to the agreement made by British Finance Minister Alistar Darling last month. The economic slowdown brought the consequential rise of mortgage arrears and repossessions this year.
There are however, some banks in the US, including Bank of America, JP Morgan and Citigroup, which have decided to stop home foreclosures for owner occupiers. While in Singapore, the situation is more bearable.
The Monetary Authority of Singapore said that it is not a big problem that borrowers get into trouble because of their home loans. Despite the forecasted longer downturn, MAS does not expect that home loans problems will inflate.
MAS stands firm on its decision to avoid intervening in commercial decisions that should be done by the banks, and though this appears to be a hands off approach on the situation, MAS deems that this as a way to avoid making the matters worse.
MAS believes that intervention is an art that they would want to learn and master someday.